Also known as: trust deed · deed of trust · deeds of trust
Written by attorneys — see sources below.
A security device by which title to real property is conveyed to a trustee to hold for the benefit of a lender until the debt is paid. The borrower retains possession and the right to redeem. Upon default the lender may foreclose to satisfy the obligation.
Tyrone Tran borrowed funds from TechVista Solutions to develop vacant land and executed a deed of trust naming a trustee to hold title until repayment. When Tyrone defaulted on the note, TechVista directed the trustee to initiate foreclosure proceedings. The sale proceeds satisfied the debt and terminated Tyrone's equity of redemption.
Tabitha Taylor granted a deed of trust containing power-of-sale language to True North Logistics to secure a commercial loan. After Tabitha missed payments, True North instructed the trustee to conduct a nonjudicial sale. The trustee provided statutory notice, sold the property, and applied proceeds first to the senior debt.
Talia Torres executed a deed of trust in favor of Trailblazer Airlines that recited it secured both an initial loan and any future advances the airline might make. After the airline later extended additional credit for equipment, Talia defaulted on both obligations. The airline claimed the later advance enjoyed the same priority as the original loan under the dragnet clause.
Tanya Tang's late husband had placed the family residence into a deed of trust for the benefit of a lender. After his death Tanya elected her statutory share and sought to include the trust assets in the probate estate. The court examined whether the deed of trust arrangement removed the property from the reach of the elective share.
Mary A. Sullivan, the widow of Ernest G. Sullivan, exercised her right under G. L. c. 191, § 15, to take a share of her husband’s estate. She filed an action in the Probate Court for Suffolk County seeking a determination that assets held in an inter vivas trust created by her husband during the marriage should be considered part of his estate. A judge of the Probate Court rejected the widow’s claim and entered judgment dismissing the complaint. In September 1973, Ernest G. Sullivan executed a deed of trust transferring real estate to himself as sole trustee. The net income of the trust was payable to him during his life, and the trustee was instructed to pay to him all or such part of the principal as he might request in writing from time to time. He retained the right to revoke the trust at any time. On his death, the successor trustee was directed to pay the principal and any undistributed income equally to George F. Cronin, Sr., and Harold J. Cronin, who survived him. Ernest G. Sullivan died on April 27, 1981, while still trustee of the inter vivas trust. He left a will stating that he intentionally neglected to make any provision for his wife Mary A. Sullivan and his grandson Mark Sullivan, and directing that the residue of his estate be paid over to the trustee of the inter vivas trust. The defendants George F. Cronin, Sr., and Harold J. Cronin were named coexecutors of the will, and the defendant Burkin is successor trustee of the inter vivas trust. On October 21, 1981, Mary A. Sullivan filed a claim pursuant to G. L. c. 191, § 15, for a portion of the estate. The parties state that Ernest G. Sullivan and Mary A. Sullivan had been separated for many years, and in 1962 the wife obtained a court order providing for her temporary support. At his death the husband owned personal property worth approximately $15,000, and the only asset in the trust was a house in Boston sold after his death for approximately $85,000. The widow appealed, and on July 12, 1983, a panel of the Appeals Court reported the case to the Supreme Judicial Court.
View caseTessa Takahashi and her co-owner held property in joint tenancy. Tessa unilaterally executed a deed of trust on her interest to secure a personal loan. Upon Tessa's death the surviving joint tenant claimed the entire property free of the encumbrance created by the deed of trust.
Mr. and Mrs. Riddle purchased a parcel of real estate, taking title as joint tenants. Several months before her death, Mrs. Riddle retained an attorney to plan her estate. After reviewing pertinent documents, he advised her that the property was held in joint tenancy and that, upon her death, the property would pass to her husband. Distressed upon learning this, she requested that the joint tenancy be terminated so that she could dispose of her interest by will. As a result, the attorney prepared a grant deed whereby Mrs. Riddle granted to herself an undivided one-half interest in the subject property. The document also provided that “The purpose of this Grant Deed is to terminate those joint tenancies formerly existing between the Grantor, Frances P. Riddle, and Jack C. Riddle, her husband. ...” He also prepared a will disposing of Mrs. Riddle’s interest in the property. Both the grant deed and will were executed on December 8, 1975. Mrs. Riddle died 20 days later. The trial court refused to sanction her plan to sever the joint tenancy and quieted title to the property in her husband. The executrix of the will of Frances Riddle appeals from that judgment.
View caseTara Tran and her joint tenant leased part of the property while a deed of trust encumbered one cotenant's interest. When the encumbered cotenant died the surviving joint tenant asserted that the lease terminated along with the encumbered interest. The court analyzed whether the deed of trust altered the survivorship consequences.
Raymond Johnson and plaintiff Hazel Tenhet owned a parcel of property as joint tenants. The deed was executed by Jettie N. Johnson to them as joint tenants. The property consisted of a dwelling house and lot. Its value did not exceed three thousand five hundred dollars at the time of Johnson's death in 1971. Assertedly without plaintiff's knowledge or consent, Johnson leased the property to defendant Boswell. The lease was for a period of ten years at a rental of one hundred fifty dollars per year. It included a provision granting the lessee an option to purchase. Johnson died some three months after execution of the lease. Plaintiff sought to establish her sole right to possession of the property as the surviving joint tenant. After an unsuccessful demand upon defendant to vacate the premises, plaintiff brought this action to have the lease declared invalid. The third amended complaint contained five causes of action. The trial court granted a motion to strike the fourth and fifth causes of action. It sustained demurrers to the second and third causes without leave to amend. But the court made no express ruling on the first cause of action seeking declaratory relief and damages. The trial court sustained demurrers to the complaint and entered a judgment of dismissal. Plaintiff appealed from the ensuing judgment of dismissal to the Supreme Court of California.
View caseYes. A deed of trust is a security device that cannot exist without a valid debt or other obligation. When no loan is funded and no note is executed, the instrument lacks the necessary debt and is unenforceable against the property or later lienholders.
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A future-advance or dragnet clause can secure subsequent advances by the same lender. Priority of those advances depends on state statute, the mortgage terms, and whether the advance occurred before notice of intervening liens.
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A power-of-sale clause authorizes nonjudicial foreclosure under the deed of trust and applicable state statute. The lender may direct the trustee to sell the property without court action, subject to statutory notice and redemption rules.
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A contemporaneous side letter may raise factual questions about the parties' intent, but the formal mortgage or deed of trust document that pledges the real property as collateral ordinarily creates an enforceable security interest. Courts examine whether the writings together modify the usual foreclosure remedies.
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